Parents less likely to borrow from children 's earnings

PRESS RELEASE (For when you need a filler)
Westforce Credit Union

29 April 2013

Financial Literacy: Parents less likely to borrow from their children when money was earned

Kiwi parents are less likely to dip into their children’s savings when times are tight, if the child has earned the money themselves.

Operations Manager at Westforce Credit Union, Victor Martick, said ‘parent dipping’ was another – but seldom talked about – perspective on the age-old debate of whether parents should give pocket money, or make their kids earn the money.

“Parents give pocket money or put money aside for their children with the best of intentions, but it’s not unusual for them to end up using it themselves when money is tight.

“If the child has actually earned the money from chores or part-time work, parents seem more reluctant to touch the money,” he said.

The view of Westforce Credit Union is that both children and parents appreciate money more if it is earned.

“Nothing is appreciated and nothing is learned if it just drops into your lap, and that’s the difference between an allowance and money a child has earned. We are not advocating that you shouldn’t give your children pocket money, but that additional money should be earned,” he said.

To support Kiwi parents in helping their kids to get the best possible start in life, Westforce Credit Union recently teamed up with EmagineIF, which is an international online social network developed in both New Zealand and the United States.

EmagineIF creates a virtual community where parents may set chores, manage the chores and pay their children directly into a Westforce savings account once the work is complete.

“We are hopeful that the collaborative nature of the Westforce Credit Union savings account and EmagineIF will encourage a culture of goal setting, working for money and savings by both kids and parents.”

Victor said children are always going to ask for money and instead of just handing it over, parents may help their child’s financial literacy by giving them a task to do in exchange for money.

“Even a four year old child can make his or her own bed. Try setting-up a piggy bank for very young kids so they can see the piggy bank grow. Then bring them in to the credit union to deposit the money personally.”

Victor offered three tips for teaching kids better work and money habits:

1. Create a list of jobs with clear rules and guidelines around what constitutes a finished task;
2. Each task should have a set amount of compensation and a completion date;
3. Encourage your child to track their savings and spending.

“Rewards should be earned, not given. When that happens it encourages both children and their parents to more fully respect the money, and the process of earning money.

“The first step begins with registering for the free EmagineIF service,” he said.

Ends

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